The Effect of the Target Security Breach on Asset Prices and Performance.
Abstract: I present a comprehensive and quantitative analysis of Target's security breach in November 2013, the second largest information breach in U.S. history. First, I discuss the impact of the breach on equity prices based on daily time series data; then, I examine the effects of the breach using a series of asset pricing models with the retailing sector panel data. I follow up with the diffe... read morerence-in-difference method to estimate potential spillover effects of the security breach adding an environmental sector as a control group. The second part of this thesis uses similar econometric methods applied to a valuation multiple, the price to sales ratio. The analysis of the impact of the event on the price-to-sales ratio multiple provides insights on the inner working of the firms. The hypotheses tested are whether or not the security breach has an effect on asset prices of the company and whether or not the security breach has an effect on the retailing sector. Using the price to sales ratio multiple, I test the hypothesis that potential competitive forces work to improve the sales of competitors in the retailing sector. The evidence of potential spillovers to the retailing rector is statistically weak.
Thesis (M.S.)--Tufts University, 2015.
Submitted to the Dept. of Economics.
Advisors: Marcelo Bianconi, and Lynne Pepall.
Committee: Marcelo Bianconi, Lynne Pepall, and Gilbert Metcalf.
Keyword: Finance.read less